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U.S. Company Liable under Delaware tort law for murders by the Indonesian army?

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[ Edited 3/16 to fix misapprehensions arising from the AP coverage.]

As reported in the San Jose Mercury News, Exxon Mobil may be held liable for harm inflicted on victims abroad by a foreign army....

Doing business in a third world country often requires "hiring" the local armed forces to provide "protection." That's what Exxon did in the Indonesian province of Aceh. It is alleged that Indonesian soldiers committed atrocities on eleven local citizens. The latter sue, not in Indonesia, but in US district court.

Exxon executives have said the Indonesian military deployed at least 3,000 soldiers during the conflict in Aceh to guard a natural gas field and pipeline operated by the company on behalf of Indonesia's state-run Pertamina energy conglomerate. How Exxon can control these soldiers, and why a US forum is appropriate (the Aceh civilians claim to fear for their lives, perhaps quite reasonably, if their identities are revealed - but does that make US law and fora applicable?), are perhaps issues to be dealt with on appeal. Clearly, no respondeat superior doctrine I have ever seen holds that a company can control the armed forces of a sovereign power.

"There was evidence that the Indonesian (military) considers anyone killed by its forces in conflict areas to be an armed rebel," the US State Department says in its latest report on Aceh. "The [Indonesian] government largely failed to hold soldiers and police accountable for such killings and other serious human rights abuses in Aceh and Papua." OK, the Indonesian government may be liable for atrocities (though it was recently praised by Secretary of State Rice), but tort liability for Exxon? Vicarious liability for a foreign government's actions? I didn't see any accusation of direct involvement by Exxon in the alleged atrocities in the District Court ruling [thanks to Hofstra prof. Julian Ku for the link]. Even if there were an allegation that Exxon officials were truly complicit in a murder the hypothetical complicity would have to be somehow a company policy, not a "frolic and detour."

District Judge Louis Oberdorfer found that �[u]ltimately, the United States � has an overarching, vital interest in the safety, prosperity, and consequences of the behavior of its citizens, particularly super-corporations conducting business in one or more foreign countries.� With great respect, this sounds like an encouragement to re-incorporate in Bermuda...

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.